ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy. While inflation measures the pace of rising prices for goods and services, hyperinflation is rapidly rising inflation, typically measuring more than 50% per month.

Detailed explanation-2: -An example of unanticipated inflation is when a country experiences inflation because of natural disasters or economic instability. The country will experience higher prices for goods and services, which people may find difficult to afford.

Detailed explanation-3: -For example, increased interest rates; if inflation is anticipated, banks can try and protect themselves by increasing the interest rates. Unanticipated inflation occurs when people do not know inflation is going to occur until after the general price level increases.

Detailed explanation-4: -Unanticipated inflation, inflation that is not expected, will redistribute income and wealth. a. Redistribution of income occurs because some wages and salaries increase more rapidly than the price level while other wages and salaries increase more slowly than the price level.